I noticed something this year while working on my taxes. If you pay foreign taxes and you don't use up all the credits for it, you can carry those credits forward.... and backward. That's pretty cool. But it expires after 10 years. If that has been there a long time, there might have been a year in the 1990's when I could have used that and didn't know about it.
Anyway, it's good to know. I'm not sure how the numbers will work out, but if your income isn't high enough to exceed the foreign earned income credit to such an extent that you have to use up the credit for having paid taxes overseas, when you go back to the US, you can deduct what you paid overseas from your US taxes. That's pretty cool.
My foreign paid taxes from years way back when are so far in the past that I can't use those credits anymore.
Carrying forward&backward Foreign Tax on US returns
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- Contrarian Expatriate
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Re: Carrying forward&backward Foreign Tax on US returns
My understanding is that you cannot carried it forward unless you have foreign income for the year you are claiming it. This is not problem in the initial year, but it could prevent you from claiming the deduction after you have left the country where you paid foreign taxes.
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